SMEs that hire job seekers under the age of 30 or workers aged 50 or older will share in a redesigned national wage subsidy pool, worth approximately $1.2 billion over four years.
In a statement accompanying the budget papers, Employment Minister Eric Abetz said the subsidy pool, which is part of the government’s Growing Jobs and Small Business package, will “support employers and assist job seekers into work”.
The subsidy pool consolidates four existing programs: the Long Term Unemployed Wage Subsidy, the Youth Subsidy, the Restart Subsidy and the Tasmanian Jobs Programme.
From November 1, eligible employers will receive a subsidy of up to $6,500 if they hire a job seeker under the age of 30, an Indigenous job seeker, a parent returning to the workforce, or a long-term unemployed job seeker.
Eligible employers that hire workers aged 50 or older will also receive up to $10,000 under the Restart arm of the program, and the cash will be available progressively over 12 months instead of the current 24 months.
This will be the first time an employment subsidy of $6,500 will be available for parents who are on income support and the subsidy available through the Tasmanian Jobs Programme will increase from $3,250 to up to $6,5000 over six months.
“These reforms will provide assistance to employers when they need it most by helping with the upfront costs of hiring and training new staff,” said Minister Abetz.
Abetz said the government will also commit $331 million over four years for a new “Youth Employment Strategy”.
This includes $212 million over the four years to provide an intensive “Transition to Work” program to support people aged between 15 and 21 years who are at high risk of long-term unemployment and welfare dependency.
Slated for a commencement date of January 1, 2016, the program will involve community-based organisations help young people develop work-related skills and undertake work experience, while also encouraging them to take up apprenticeships or traineeships,
An additional $106 million will also be provided for support programs for vulnerable young people at most risk of long-term unemployment, including migrants, parents and those experiencing mental illness.
The budget will also include $18.3 million over five years for a national work experience program, which will allow job seekers to complete up to 25 hours of unpaid work experience a week for up to four weeks while still receiving income payments.
“This will allow particularly young job seekers the change to develop practical skills, gain workplace experience and better connect them with real jobs,” Abetz said.
Joe Hockey in Adelaide. ‘It is hugely important … giving people the chance to work longer’. Picture: Roy VanDerVegtSource: News Corp Australia
Older Australians will get new rewards for finding work and strong incentives to put off their retirement as the federal government recasts its controversial pension savings in a wider budget reform aimed at boosting the workforce at the same time it helps to cut the deficit.
Federal cabinet has agreed to make faster payments of up to $10,000 to employers who hire older Australians as part of an overhaul of job programs to help tens of thousands of people back into the workforce.
A separate budget measure will give people approaching retirement a new incentive to stay at work for a few more years in the knowledge they could collect a bonus when they choose to claim the Age Pension.
The budget will also spare about two million retirees from an unpopular change to pension indexation, making the savings instead from fewer than 400,000 people with substantial private assets.
The tighter pension rules will mean that most of the burden for the savings will come from retirees who not only own their home but also have hundreds of thousands of dollars in savings, real estate and other investments.
Ministers will argue that the new approach is fairer than the indexation changes announced last year, which would have seen a gradual fall in the pension when compared with wages over the long term and would have raised fears of pushing older Australians into poverty.
The new approach represents a dramatic softening in Tony Abbott’s message on work and retirement, offering help to those who want to work and giving a reprieve to many elderly voters who were alarmed at the prospect of a cut to their payments.
A major initiative in the May 12 budget will be a more generous payment to companies that hire older Australians, fixing problems in a program called Restart to make it easier for mature workers to get jobs.
Employers currently receive $3000 six months after they have hired a worker aged 50 or over and a further $7000 in stages over the next 18 months, but these payments will be accelerated in the new scheme.
Australians over 50 currently have to wait for six months on income support or the pension before they qualify for the job incentives. That will also be shortened under the new rules.
Another new program will be linked to the scheme to offer incentives for training so that older workers will get more help to retrain and take up a job, helping to prevent them falling back on unemployment benefits or pensions.
Joe Hockey has taken the lead on the assistance for mature workers in the wake of a report from the Human Rights and Equal Opportunity Commission that found one quarter of workers over 50 felt they had been discriminated against because of their age. The Treasurer warned last week that discrimination was far too prevalent, while signalling more recently that the budget would include new measures to help those workers.
“It is a hugely important issue, giving people the chance to work longer,” Mr Hockey said on Tuesday, adding there were a “few things” in play in the budget to address the challenge.
The Weekend Australian has confirmed that the overhaul of the Restart program is one of those new actions and that other measures have also been discussed to give workers more incentives to put off retirement.
A key issue is whether people who keep working beyond the age of 65, and therefore ease the burden on the public purse, deserve a reward when they ultimately choose to claim the Age Pension. Mr Abbott praised an old policy that offered new pensioners a lump sum of up to $49,000 if they had stayed in work and deferred the pension.
Early last month he said that idea was “certainly worth looking at”. Labor closed the Pension Bonus Scheme to new entrants in 2009 because data showed participants would have continued working anyway. Mr Abbott has been considering other ways to achieve the same objective.
With the federal budget just two weeks away, you would expect Joe Hockey would be talking about the jobless.
Photo: Mark Graham/Bloomberg
It’s curious how little attention unemployment has been getting compared with other federal government challenges like tax policy, debt and deficit.
The number of people looking for a job has now been over three quarters of a million for the past nine months – it’s 18 years since Australia had that many people out of work. Last month’s count of the unemployed – 768,600 in trend terms – was 60 per cent more than before the global financial crisis.
With numbers like that and the federal budget just two weeks away, you’d expect Joe Hockey would be talking a lot about the jobless. But in five lengthy media doorstops, interviews and Q&A sessions by the Treasurer last week he was not asked one question about unemployment. The transcripts for those interviews run to more than 7000 words but the word “unemployment” was only uttered once.
While the rate of unemployment has edged down to 6.1 per cent after reaching a 12-year high of 6.4 per cent a few months ago, there are troubling trends in the job numbers. The rate of long-term unemployment – when people have been out of work for a year or more – has been increasing at a faster pace than the total unemployment rate. Data released by the Department of Social Services last week showed the number of long-term job seekers receiving the Newstart allowance surged by 11.2 per cent to 275,725 in the year to March and has touched decade highs over the past few months.
The Fairfax-Lateral Economics Index of Australia’s Well-being has underscored the growing economic and social damage caused by long-term joblessness. In the December quarter alone the national wellbeing cost of long-term unemployment joblessness reached $1 billion. “This problem should be showing up on the dashboard much more than it is,” says the index’s creator and leading economist Dr Nicholas Gruen.
Another challenge largely ignored in the pre-budget debate is that young people are faring worst of all in the jobs market. The unemployment rate among 15 to 19-year-olds hit 20 per cent earlier this year – a level not seen since the mid-1990s. An index produced by the Brotherhood of St Laurence showing the probability of young people finding a job has fallen markedly in the past year. For teenagers, the job probability index is at levels not seen since the deep recession of the early 1990s.
It’s little wonder that the latest Ipsos Mind and Mood report, which has been tracking social attitudes and sentiment in Australia for 35 years, found job security was the biggest worry of those surveyed. The focus group discussions revealed a widespread perception that no one was safe from mass redundancies. It’s a reminder of how much unemployment matters to households.
Over the past four decades Australia’s economic policy guardians at the Federal Treasury and the Reserve Bank have traditionally had to deal with short sharp rises in unemployment. The conventional response has been to slash interest rates and allow the budget balance to worsen as dole payments rise and tax revenue falls. These “automatic stabilisers” play an important role in cushioning the economic blow. Analysis released by the International Monetary Fund this month shows the effective use of automatic stabilisers is of great benefit to economies and leads to higher medium-term growth.
But this phase of rising unemployment has been different as traditional tools for managing unemployment don’t seem to get the same traction. The jobless rate has slowly racheted higher as the economy lumbers at a below trend rate of growth in the aftermath of the mining boom. The Reserve Bank has cut interest rates eight times since 2011 to historic lows and yet the unemployment rate has continued to creep up. The bank’s governor, Glenn Stevens, has warned that the power of interest rates to “summon up additional growth in demand could, at these levels of interest rates, be less than it was in the past”.
Despite all the Abbott government’s tough talk on the need to deal with debt and deficit, its policy response to the upward trend in unemployment has also been quite conventional. Last year’s federal budget scheduled the toughest fiscal repairs to take place years into the future when, hopefully, the economy is stronger.
Hockey has indicated he will allow the “automatic stabilisers” to keep working. Last week he said the government would not cut spending to “chase down” the big revenue write-downs caused by falling commodity prices and that next month’s budget would “support jobs”. “We’ve got to ensure that the work of the Reserve Bank is not at odds with the work of the government, and vice versa,” he said last Thursday. “You can’t have your foot on the budgetary brake and at the same time have the governor of the Reserve Bank with his foot on the accelerator. It sends a mixed message.”
What if this conventional policy response doesn’t work and the dole queues grow longer?
That would leave Hockey with two options unlikely to be very popular with his Coalition colleagues. He could spend more on things like infrastructure projects in a bid to boost employment – although that would push the budget deeper into deficit. The other alternative is structural reforms to make the labour market more flexible, something sure to anger a lot of voters.
The Treasurer must be relieved he’s not being quizzed more about unemployment.
Number of people without jobs at 6.1 per cent, falling for the second month in a row.
The pressure eases on Centrelink … for now. Photo: AAP
The rate of unemployment fell to 6.1 per cent in March, confounding economists’ expectations that it would remain at 6.2 per cent.
The Australian Bureau of Statistics reported the 0.1 percentage point drop just a day after the International Monetary Fund predicted unemployment to stay well above 6 per cent until 2016.
The news immediately caused the dollar to jump from just over 77 US cents to closer to 78 cents. However it soon dropped to 0.774 US cents.
The ABS said the number of people employed increased in March by 37,700, reaching 11,720,300.
The number of men in full-time employment increased by 24,800, while the number of women in full-time employment increased by 6,700.
The total number of hours worked in March were 1.73 billion.
While the surprise drop in unemployment is potentially very good news for the economy, in trend terms it represents no change, at 6.2 per cent.
Nevertheless, the March figure is far below the IMF’s forecast that unemployment will average at 6.4 per cent for 2015.
Responding to the figures, Employment Minister Eric Abetz said: “We are absolutely determined to create every possible opportunity to create jobs in Australia,” adding that he devotes “every waking moment” to achieving this goal.
The release of the Intergenerational report in early March catapulted me into a state of confusion.
Only the night before, I had been at the Australian Human Rights Commission launch of their corporate toolkit where they played a short video developed by the Age and Disability Discrimination Commissioner, the Hon Susan Ryan AO. This video celebrates the power of oldness. Not only is it thoroughly entertaining but it also dispels some of the myths about the capability of people in their more mature years.
However, the quirky video also revealed a sinister reality – that mature age workers face substantial discrimination and other barriers to fully participating in the workplace.
The Intergenerational Report has projected life expectancies to increase to 95.1 years for men and 96.6 years for women by 2054-55. It also projects labour market participation rates among those aged 65 and over to increase from the current rate of 12.9% to 17.3% in 2054-55. But until we tackle widespread ageism, is this increase really possible?
For most people, paid work is an incredibly important part of their lives. Not only does it provide a pathway to financial security but it also provides social interaction. It can contribute to improved self-esteem, mental and physical health and life satisfaction. Yet the Australian Human Rights Commission has reported that age discrimination was most likely to occur in the workplace, and that more than a third of Australians aged 55+ years have experienced age-related discrimination.
Dishearteningly, the Commission also found that younger business decision makers are the most likely to hold negative views of the workplace capabilities of older workers. In the context of an ageing population and an ageing workforce, this type of stereotyping is very problematic.
All of this is despite the fact that we know employing older workers can bring a range of benefits both to our workplaces and to the national economy. For example, increasing the labour participation of women throughout their working lives is estimated to have a major impact on the national economy.
Economist have noted the major impact that increasing the participation of older women would have on the economy. Modelling by the Productivity Commission indicates that increasing older women’s labour participation rates to match men’s could increase per capita GDP growth to 2044-45 by 1.5%. Research by the Grattan Institute has found that the combination of increased labour participation by women and older people could grow GDP by $50 billion over the next decade.
For older women, continued workforce participation throughout their later years is especially important as their retirement savings are likely to be much less than men’s. Men have an average super payout of $198,000, while women average $112,600[1] due to the increasing gender pay gap and time out of paid work to accommodate caring responsibilities.
There are clearly benefits to our economy of ensuring increased labour market participation by our older workers. But what other benefits can older workers bring to our workplaces?
Older workers often have significant knowledge and skills that they accumulated over their time in the workforce, and can assist employers and their colleagues to:
look at business operations from a different perspective
improve business processes
fill many skill or knowledge gaps
provide mentoring to less experienced employees
train other employees by sharing skills.
So how can we start a positive conversation in workplaces around engaging older workers and removing bias and discrimination against them?
Diversity Council Australia has conducted extensive research into labour market issues affecting mature age women and what employers can do to attract and retain older women. In our report, Older Women Matter, a framework is laid out to positively support women into improved workforce participation. This framework (see below) provides a set of guided principles around productive employee engagement, workplace flexibility and the removal of structural and cultural barriers.
Employers can implement a range of initiatives to better support mature age works, in particular older women. But first we need to stop thinking negatively about older workers and start appreciating the enormous potential and value that older workers bring to workplaces across the country.
Then we can truly harness the power of oldness.
By Lisa Annese Chief Executive Officer Diversity Council Australia
Older workers do not steal jobs from young people and wages and job prospects for the under-50s would actually improve if baby boomers were kept in work longer, a study found.
Ros Altmann, the Government’s older workers’ champion, said the idea that older workers took jobs from the young was a “myth”.
Ageist attitudes were hurting the economy, she said, predicting that an extra £25 billion would be generated if half of the 1.2 million employed or inactive older people seeking work were given jobs.
Rather than reducing the number of roles available to young people, extending British working lives would “better living standards for all of us”, she said.
“One of the most persistent myths I have encountered is that encouraging more older workers in the labour force will take jobs away from the young,” she said.
“On the contrary, the evidence shows keeping more older people in work actually improves employment prospects for younger generations, and has in some cases even increased their wages.
“Older and younger workers are not readily substituted for each other [and] there is not a fixed number of jobs in the economy.”
“The more spending power in the economy, the more jobs can be created.”
Her research showed that as the population ages, the number of people aged 50 to state pension age who were not working would increase from 2.9 million to 5.4 million by 2033 at current employment rates.
Many of the additional 2.5 million people would have “relatively low incomes and inadequate pensions”, she said.
This would “place a rising burden on younger generations”, she said, warning that “immigration alone cannot fill the gap”.
Ms Altmann, a former investment banker and academic at London School of Economics and at Harvard University, provided evidence to the contrary. She said historically, higher employment rates among older workers had benefited younger generations.
Ros Altmann found evidence to dispel the ‘myth’ that older wokers deprived the young
“After the Second World War, the dramatic increase in women’s labour force participation did not mean fewer jobs for men,” she said.
“Instead, it boosted economic growth, and more two-earner families with higher disposable income created new jobs as spending power in the economy increased.”
She contrasted the events with the “job release scheme” in the Seventies, which incentivised early retirement. The scheme was “accompanied by higher unemployment for young people”, she said, and was branded a “spectacular failure” by Age UK.
In France the government from 1971 to 1993 encouraged early retirement, only for employment among both old and young to fall. From 1993 to 2005, more older people stayed in work and youth employment rates in France increased, the report found. The same trend was noted in Germany and China.
“In the Fifties, over 90 per cent of men aged 60 to 64 were working, while it is now around 50 per cent,” Ms Altmann said. “For too long social norms have dictated that once you reach a certain age, you should expect to suddenly stop working. This must change. ”
Steve Webb, the pensions minister, criticised “old-fashioned and outdated perceptions” of older people and called on employers to retain and hire older staff. “From next month, we will be trialling targeted and intensive support for older jobseekers, including rolling out an ‘older workers’ champion scheme across every part of the UK,” he said.
It’s well and truly time to start thinking about how to make older workers feel welcome, experts say.
“Let’s get over our shock that older workers are going to be there longer and now ask the question about how can we make that useful and productive for everyone,” University of South Australia human resource management research professor Carol Kulik says.
“I think we really do need to be much more accommodating for older workers.”
The experts have some tips for both older workers and employers.
* FOR MATURE-AGE PEOPLE TRYING TO FIND A JOB:
BE PERSISTENT
It’s going to be tough, it’s difficult, but the key thing is to keep at it,” says Greg Goudie, executive director of South Australian employment service DOME (Don’t Overlook Mature Expertise).
BE CONFIDENT
“They’ve got so much to offer. They probably don’t know how much they do have to offer,” Kronos Australia and New Zealand managing director Peter Harte says.
He advises learning how to write a resume and remarket yourself.
“You’d be surprised at the great things that person’s done that they haven’t really recorded.”
NETWORK
Mr Goudie says older workers shouldn’t be afraid to knock on doors, as 80 per cent of jobs that are filled are never advertised.
RE-EXAMINE YOUR WORK EXPERIENCE
Mature-age people do have work experience skills, even if it’s stating that you’re able to work in a group with other people.
“A lot of employers hold that in high regard,” Mr Goudie says.
LEARN A DIFFERENT SKILL
Skilled workers have a greater chance of staying in the workforce than unskilled workers, Mr Harte says.
He advises learning a different type of skill and make sure employers know they can be very flexible.
GET ASSISTANCE
A lot of people who get to 50 and 55 and are out of work for a year can think it’s all too hard and `I’ll just give it up”, Mr Goudie says.
* FOR EMPLOYERS AND THE BROADER COMMUNITY:
GOVERNMENT’S RESTART PROGRAM
The federal government’s restart program – offering a $10,000 incentive to hire and retain job seekers aged 50 and over who’ve been receiving income support – may be counterproductive, Edith Cowan University psychology discipline leader Dr Eyal Gringart says.
“The message this policy sends is that older workers are inferior to younger workers and require special consideration.”
THINK ABOUT THE SIGNALS SENT TO OLDER WORKERS
Organisations don’t signal a very strong openness to older job applicants, Prof Kulik says.
Their websites can have photos of bright, shiny young people and talk about fun and high-energy environments.
“It’s very easy I think for an older job seeker to think `that’s a signal, that’s a code for saying you don’t want somebody like me’. It’s a very discouraging process.”
HELP WORKERS UPSKILL
Mature-age workers in organisations that adopt specific mature-age practices report high levels of engagement, Prof Kulik says.
The practices can be to help older workers upskill, having alternative career paths so an employee can move into phased retirement, take on a new work assignment or mentor junior people.
FLEXIBILITY
Organisations haven’t thought much about what kind of flexibility older workers need, Prof Kulik says.
It’s not start times or which days they work. It’s opportunities to take extended leaves of absence if they have to for health reasons or alternatively to travel, while maintaining their job security.
SOME INDUSTRIES NEED TO ACT NOW
Professionals and managers tend to have more flexibility and autonomy, Prof Kulik says.
It’s not as clear what will happen for people with physically demanding jobs such as construction workers, miners and plumbers if flexibility isn’t offered, she says.
“Either we’re going to have to retrain them and do some kind of major career shift that works better or we’re going to have to be a lot more flexible about thinking about how work can be designed.”
Australia’s prosperity is at risk of being put under increasing pressure over the next four decades unless Australians work longer and productivity is improved, according to a major report due to be released today.
The ABC understands the Intergenerational Report, looking at population and budget projections to 2055, also states that economic reform is “crucial” to improve living standards. The document will be released by Federal Treasurer Joe Hockey today. Like previous long-term forecasts, the report will predict that the proportion of working Australians will decline as the nation’s population ages. By 2054-2055, the workforce participation rate is expected to be 2.2 per cent lower than today at 62.4 per cent. While the report will state “it is fantastic Australians are living longer, healthier lives” it warns there is a risk to GDP and income growth unless the Government can grapple with these demographic changes. It will suggest those not in the workforce, in particular older Australians and women, need to be encouraged to get a employment, re-enter the workforce, or prolong their careers.
To do that, the report will advocate policies to improve the accessibility of childcare, more flexible working conditions and the removal of discrimination. Australia currently trails Canada and New Zealand in terms of total workplace participation, though gains have been made in recent decades. For example, the report will show the number of working Australians aged 55 to 64 increased by roughly 18 per cent between 1978-1979 and 2013-2014. Also, the number of women in work has increased by 20 per cent since 1974-1975.
The Government is likely to use the Intergenerational Report to make the case for politically difficult policy changes in the next budget. The document will say reforms “to improve productivity will be crucial to achieve the growth in living standards” and wages. It will show average income levels have risen from about $40,500 in the early 1990s to about $66,400 today. “For every hour that is worked, Australians today produce twice as many goods and services per hour of work than they did in the early 1970s … It is no coincidence average incomes have almost doubled,” the report is expected to say. Assistant Treasurer Josh Frydenberg said the “landmark report” was a vital addition to complex national policy debates. “The detail it describes … will help the public understand the context for the Government’s economic decision making over the years ahead,” Mr Frydenberg said.
Labor and Greens wary of politicisation
The Intergenerational Report will also point out that the Government needs to ensure spending is sustainable. It will contain three forecasts of the nation’s cash deficit in 2054-2055. Under the policies of the Labor Government, the report suggests the cash deficit would be 12 per cent of GDP. But under the policies the Abbott Government has managed to pass so far, it forecasts a deficit of half that, or roughly $266.7 billion in today’s dollars.
This should be an independent report and I am worried it will be used to justify savage cuts in the budget.
Greens Senator Richard Di Natale
Also, under the policies the Abbott Government has proposed but not passed, it forecasts a surplus from 2019-2020. The Opposition says it is wary the Government is manipulating the report to try to justify its “unfair budget”. “This Treasurer has manipulated the timing of the release, he’s manipulating the content,” Shadow Treasurer Chris Bowen said. “We know that he hasn’t accepted the Department of Immigration’s advice about what the population figures in the report should be and he’s now bringing down a chapter on the Labor Party, it appears.” The Greens plan to refer the report to a Senate committee, to scrutinise its underlying assumptions and forecasts. “So far the discussion we are hearing around the Intergenerational Report seems to indicate we’ve arrived at a conclusion before we’ve even looked at the issue in detail,” Greens Senator Richard Di Natale said. “This should be an independent report and I am worried it will be used to justify savage cuts in the budget,” he said. Source: abc.net.au
Australia’s notoriously labyrinthine $150bn (£75.8bn) welfare system last week underwent a major review, which essentially recommended an overhaul. However the Commonwealth-funded age pension was conspicuously absent. A politically sensitive topic, it was not in the scope set by the conservative Abbott government, despite it being the largest and most expensive part of Australia’s social security.Australians are living and working for longer. By 2013 the number of Australians aged 65 and over had increased by 533,000 from five years previously, and 17% of people aged 45 and older expected to work beyond the age of 70. In 2012-13, more than half of all retired men and a quarter of retired women named the government pension/allowance as their main source of income, a 45% increase on the number who told the Australian Bureau of Statistics they relied on it when they first retired. Superannuation payments (9.5% of a salary contributed by an employer) have been compulsory since 1992.State pensions are available to Australian residents over the age of 65 (67 by 2023) who have lived in Australia for at least 10 years (with some exceptions such as refugee status) and who meet income and asset requirements. In 2011, that translated to 60% of Australians of qualifying age. People who work past the pension age can still receive partial benefits or a lump sum under incentive schemes.Each fortnight pension recipients get a maximum payment of A$776.70 (£392) for singles, or A$585.50 (£296) if you are part of a couple. A payment supplement of up to A$63.50 (£32.13) a fortnight covers a pharmaceutical allowance, on top of Australia’s publicly funded universal healthcare benefit scheme, and utilities allowances. Each state and territory also offers cheaper travel and retail discounts to people over 60. Additional services, which are means-tested and partly financed by contributions from a recipient’s pension after a departmental assessment of what is needed, include the Home Care package, and the Home and Community Care package. People over the age of 65 can apply, or from 50 if they are Aboriginal or an Torres Strait Islander. Helen Davidson, Darwin
Germany
At the core of the German welfare benefits system is the comprehensive social insurance system into which most workers pay, which includes healthcare provision, unemployment insurance and pension insurance. Once you pay into all these parts of the system, (about 15.5% of your salary for healthcare, 3% for employment insurance, nursing care insurance, 2.2% or 1.95% for those with no children, 18.9% for pension insurance – most of these shared with an employer) you are entitled to a range of benefits, including healthcare for older people. Prescriptions and glasses are covered by that system so don’t have to be applied for separately, and are not classed as benefits.
A person continues to pay into the health insurance system once they are drawing a pension, unless they don’t have the means. Roughly speaking, on retirement, individuals receive half to two-thirds of net income as a pension. About 85% of the workforce is enrolled in the system. There is no legally set minimum or maximum pension.
The normal retirement age for everyone born after 1964 is 67 years. Women who take time off to have children have their contributions topped up by the state. But an OECD report published this week shows that Germany has the widest pension benefits gap between men and women in Europe and the US. The average monthly pension received is around €1,052 (£767.46) for men in the old West German states, and €1,006 (£733.9) for those in the old East German states, while for women the figures are €521 (£380) and €705 (£514). Kate Connolly, Berlin
Japan
Roughly one in four Japanese are 65 or over – that proportion is expected to rise to one in three by 2025. Pride that life expectancies for Japanese men and women are among the highest in the world is tempered by concern over how to pay for welfare in the coming decades, when there will be fewer people of working age to foot the bill. In 2012, the full basic pension was ¥786,500 (£4,342) a year, 16% of average earnings of 4.79 million yen (£26,443) a year, according to OECD figures. Everyone aged between 20 and 59 is expected to enrol in the basic national pension scheme, but only those who have paid in for a minimum of 25 years are eligible to draw a pension when they retire at 65. Full-time company employees and their spouses are automatically included in the employees’ pension scheme, which provides additional contributions to the basic state pension, proportional to an individual’s salary. The government estimates that about 85% of Japan’s workforce draw from the employees’ pension scheme. The fuel allowances for low-income residents will be cut by about ¥3bn (£16.2m) in this financial year. People aged 75 or older only need to shoulder 10% of their medical costs unless they have a high income. Everyone else pays 30% of the total cost. Some cities offer reasonably priced annual passes that enable elderly passengers unlimited travel for a year. Justin McCurry and Chie Matsumoto, Tokyo
Nordic countries
Unlike Sweden and Finland, in Norway pensions are holding up, and poverty among pensioners is actually falling dramatically, despite rising average wages. The official pension age has been 67 for both men and women since the 1970s, but it is possible to draw a full old-age pension from 62 and continue to work full time, while there is a range of options to draw a partial pension. But 67 remains the age when most people aim to retire – and the age at which people on disability benefits are transfered to pensions. Norwegians can continue to accrue pension entitlement until they are 75. Norway’s pension system is in transition, and currently two versions are in operation as the old one is phased out. The outgoing one is a defined benefit scheme comprised of a flat-rate universal benefit, an earnings-related second tier and a minimum benefit floor of almost 50% of average earnings after tax. It is a strongly progressive, egalitarian system due to the comparatively generous level of minimum protection and a decreasing replacement rate for earnings above the average annual wage. Marginal tax rates on pension income rise rapidly. A worker in Norway with 40 years’ contributions on an average wage can expect to enjoy a pension of about 67% of their previous income after tax. A new system is gradually taking over that consists of a defined contribution scheme, plus a minimum guaranteed pension. The payouts from this scheme are subject to a life expectancy adjustment, implying that old-age benefits for each new cohort of pensioners will be reduced in proportion to increases in longevity compared to 2010. Employment among older people is high in Norway, with more than 70% of people aged between 55 and 64 still working – well above the EU average of around 50%. In Sweden, pensions used to be more generous than in Norway, but the average pension is now just above 50% of wages, and it is expected to dip below that level if life expectancy increases and the retirement age is not postponed. The guaranteed minimum pension is about one-third of the net average wage. Pensioners in Sweden and Norway get discounts on public transport, entry to museums and an income-tested housing allowance is available. Pensioners – like other people in need – can also apply for social assistance to cover one-off payments and special needs. David Crouch, Gothenburg
Russia
The legal retirement age in Russia is early by European standards: 60 years for men and 55 for women. There has long been talk of raising the age, but given that male life expectancy is only just above 60, the move would be deeply unpopular. Russia’s finance minister said in a recent interview that the pension age should be increased gradually until it is 63 for both men and women. There is also talk of introducing an income test for pensioners – currently none exists and working pensioners or those receiving money from investments or other sources can still claim their pension. Workers involved in certain categories of hard labour, those who have spent more than 15 years working in Russia’s far north, and mothers of more than five children, are entitled to begin receiving their pensions earlier. A new points-based system is being phased in that will determine how much money pensioners receive based on how many years they worked. Currently, the basic state pension is around 4,000 (£40) roubles per month, but almost all pensioners receive a number of add-ons, and the average pension across the country is around 11,000 roubles (£110) per month, which is a little under one-third of the average salary. Some regions have particular allowances, for instance pensioners who have been registered living in Moscow for more than 10 years have their pensions topped up to at least 12,000 roubles by the Moscow city government.Pensioners also have a number of travel subsidies, discounted medicine, as well as small savings in certain supermarket chains, usually offered on particular days of the week. There is no guarantee of the security of Russia’s pension fund further down the line, and indeed it was recently admitted that 243bn roubles (£2.4bn) had been redirected from the pension fund to pay for costs associated with annexing Crimea. Shaun Walker, Moscow
United States
As the country ages there is no shortage of local, state, national and not-for-profit initiatives that cater to older citizens’ needs. From prevention of elder abuse to ageing awareness to help with nutrition, assistance programmes are a common feature in many communities. Take the “Campus Kitchens Project”, which along with the older persons’ organisation, AARP Foundation announced in 2014 a three-year renewal of its outreach effortsusing student volunteers to combat hunger and isolation among older people. With an estimated 9m older Americans at risk of hunger and the number of hungry people over 50 up by 80% in a decade the initiative harnesses a number of student-run kitchens at colleges across the country to help tackle food insecurity. Meanwhile in Pennsylvania, one project, “Coming of age”, under the auspices of a collection of organisations, including the state branch of AARP has trained administrators in methods to revamp “seniors centres” to make them more appealing for older people to spend time in with numerous benefits including reducing social isolation. While there are plenty of examples of inventive community-based initiatives, there are wider challenges not least of which is funding retirement. Exactly what income and benefits an individual receives when they reach 65 depends on a host of factors including which state they live in, whether they continue working past retirement age and in what capacity, the level of private or public sector employment-based pensions and other savings or investments. The Pension Rights Center in Washington DC and the Pension Policy Center report that of the 44.7 million Americans over the age of 65 in 2013, half had a total annual income of less than $20,380 (£13,271) – from all sources. Most US retirees receive income from social security, a federal social insurance programme to which people contribute via direct taxation. In the absence of a national state pension, it is the primary source of income for many and widely regarded as the foundation of retirement income. In 2013, 85% of older Americans received monthly social security benefits. The average annual benefit from social security for retired workers in 2013 was $15,132 (£9,852). According to the Social Security Administration, the national average wage in the same year was $44,888. For three out of five people over 65 who receive social security benefits it accounts for half of their total annual retirement income but it is particularly important for lower income Americans. In 2012 one in four people over the age of 65 received all of their income from social security. According to the Global Age Watch Index 2014 the modest nature of social security payments and the high reliance on it means that the US has a higher incidence of elder poverty than most other countries One of the most valued public services available to older Americans is Medicare, a national health insurance system with almost universal coverage. According to Global Age Watch the programme provides “good access” to medical services and preventative care. However wWhen it comes to access to services for older people with long-term care needs, however, there are many barriers to obtaining affordable, quality provision because most adults don’t have separate insurance coverage for these. Mary O’Hara, Los Angeles
South Africa
Old age pensions are provided to people above the age of 60 earning below R49,920 (£2,763) if single and R99,840 (£5,527) if married, and whose assets do not exceed R831,600 (£46,041) if single and R1.7 million if married. Beneficiaries must not be maintained or cared for in a state institution, and should not be in receipt of another social grant. An elderly person is typically eligible for a grant of 1,350 rand (£75) per month. Government guidelines state: “It should be noted that social grants for adults are paid on a sliding scale – the more income and applicant has, the less he/she will receive for the grant.” They can turn to extended families and NGOs for help. The services NGOs offer include social support groups, training and education, income generating projects, frail care services, transport to health facilities and luncheon clubs and home based care, according to the Older Person’s Forum. But most of these services are non-existent in rural areas. Nearly three million people were old age pension recipients in 2013/14. There are private companies that offer these benefits to pensioners – such as Specsavers with spectacles and some bus companies regarding travel.South Africa has one of the largest voluntary retirement funding systems in the world (and for the large proportions of people in employment, these arrangements are mandatory conditions of service). There are programmes of support in provincial social department for old age homes.There is broadly free healthcare in public health facilities. Public housing and transport also benefits many elderly people. Those retiring early have their pensions cut by 3.6% for each year, except those forced into early retirement, whose pensions can by cut by a maximum of 10.8%. David Smith, Johannesburg
Italy
The state pension is €219-€230 (£159-£167) per week for people under 80 and €240.30 (£175) for over-80s, depending on Older people, like all other Italians, receive free healthcare under the national health system. The services are either delivered free of charge, or patients pay for them and are reimbursed. Other benefits differ from region to region. For example, residents in Rome over the age of 70 are offered free bus and metro passes. Stephanie Kirchgaessner, Rome
France
The legal retirement age in France now stands at 62 for people born between 1955 and 1973. However a full state pension is only awarded for those who have worked 40-43 years. Those born after 1973 will have to work for 43 years to obtain a full pension at 62. In certain cases, including those who have taken time out for parenting or taking care of a disabled person, it is possible to claim a full pension at the age of 65 (or 67 depending on the date of birth) regardless of how long the individual has worked. For private sector workers, the full pension takes into account the 25 best years worked, with an allowance for inflation, and can total half their monthly salary. Civil servants have a more generous scheme: they can retire on a state pension of 75% of average income, calculated on the basis of their last six months in work (minus bonuses). However under reforms announced last year, civil servants will have to work an extra two years – 43 instead of 41.5 – to receive a full pension, bringing them into line with the work period requirements of the private sector, even though the calculation remains different. For unemployed pensioners, a single person with less than €9,600 (£6,988) per year or a couple with less than €14,904 per year can claim an allowance called the allocation de solidarité aux personnes agés (Aspa), or elderly persons solidarity benefit. In the case of a single person surviving on €7,000 a year, the Aspa allowance would be €2,600 (£1,893) – calculated according to the €9,600 benchmark figure minus the €7,000. A couple with €13,000 would receive €1,904 per year. Anne Penketh, Paris
Ireland
The state pension is €219-€230 (£159-£167) per week for under-80s and €240.30 (£175) for over-80s, depending on social insurance contributions while working, regardless of any income from private or occupational pensions. Pensioners, like those in receipt of long-term social welfare payments or those who can prove they cannot provide their heating needs during winter, are entitled to a means-tested weekly winter fuel allowance of €20 (£ 14.54) per household. Those over 70 receive a free TV licence and in some cases are eligible for means-tested free electricity and gas depending on their fiscal circumstances. All pensioners receive free bus and rail travel, not only in the Irish Republic but across the border in Northern Ireland. Henry McDonald, Dublin Source: The Guardian